We’re only 2 months in, but 2015 already feels like a bit of a roller coaster ride as far as Wall Street is concerned.
There’s been volatility, sector dropouts and surges, surprises, and so much more. And with all that going on, ‘getting it right’ so far would have taken a pretty wild combination.
Here’s the perfect storm for investors this year…
According to Hedge Fund Research, which tracks over 10,000 funds, hedge funds have returned just 0.05% so far in 2015. That just illustrates how difficult to keep up with this year has been (and how useless hedge funds are for the most part).
So what have we seen so far this year?
There’s been financial struggles in Europe, a rather crazy drop in the price of oil, some decent emergences for China and India, mixed in with market sectors going separate ways…
Here’s what the most successful hedge fund could look like through January and February:
- It has bet against (shorted) the euro and oil and even energy companies,
- It has been bullish on the dollar,
- It’s owned healthcare stocks, European bonds, and stocks of companies that consume oil.
This year has been all about flexibility for those of us who’ve wanted to significantly outgain the market.
And I think this has a very good lesson in it:
If you want to make real profits in the stock market, you can’t be overly rigid. You have to be on your toes with the ability to adapt.
And while there’s plenty of money to be made by being good in one area of the market, fortunes are built on Wall Street by those who are always looking for market situations that they can take full advantage of next…
